Deccan Gold Shares Jump 26% This Week After Board Approves Buying Two Gold Mines
Deccan Gold to acquire 60% stake in Avelum and 31% in Kalevala Gold with 10 tonnes of combined potential gold resources.
Shares of Deccan Gold Mines Ltd. have jumped 26% so far this week after its board approved the acquisition of two gold mines in Kyrgyzstan and Finland.
The board approved buying a 60% stake in Avelum Partners LLC, Kyrgyzstan, through a share swap agreement with Hira Infra-Tek Ltd., India, and Med Edu Care Marketing Management, Dubai, according to an exchange filing on July 9. Avelum operates a gold mine in the eastern part of Kyrgyzstan with six tonne of potential gold resources.
Deccan Gold's board also approved the acquisition of 31.52% of Kalevala Gold Oy, Finland, through a share swap agreement with Lionsgold India Holdings Ltd., Mauritius. The project has four tonne of potential gold resources, with Kalevala owning the rights to acquire mining leases and licences for gold in the Northeastern part of Finland.
Deccan Gold will issue 1.85 crore shares for the Avelum acquisition and 11.5 lakh shares for the Kalevala acquisition, at a price of Rs 53.47 per share.
Hira Infra-Tek is owned by the promoters of Godawari Power and Ispat Ltd.
Since it is a share swap transaction, GPIL's promoter entity will have an early double-digit stake in Deccan Gold. The final holding structure, including Hira Infra-Tek, Med Edu Care, and Lionsgold, will be confirmed after DGML receives approval for raising funds at the EGM scheduled for August.
Shares of Deccan Gold Mines gained 26.38% this week to Rs 77.36 apiece, compared to a 0.94% gain in the NSE Nifty 50.
Total traded volume stood at 2.8 times its 30-day average.
The stock has tripled in 52 weeks, with a 216.63% gain in the past one-year, and almost doubled, giving 96.18% returns so far in 2023. This compares to a 22.37% rise in the benchmark Nifty 50 over the past one-year and 7.37% gains in 2023.
